The Cascade or Kingdom Flow Method: How Should I Prioritize My Money?

The best way to think about this is like a waterfall:

The Waterfall Method

1) Bills & necessities first, cover your rent and bills

2) Emergency fund Then, work on building a cushion that would cover 3-6 months of living expenses. but if you have credit card debt, consider starting with a $2k starter emergency fund so that you can start paying off credit cards faster

3) Pay off all your credit card debt Go on a mad sprint to get rid of this debt, it's a freedom killer.

4) max out 401k match (if you have it) Once you fill up Cups 1-3, you have a solid financial foundation in place, so now you can start investing, starting with FREE employer match money

5) Max out Roth IRA or backdoor Roth IRA This is a non-negotiable, everyone should be doing this whether you're self-employed or you have an employer, whether you make a little money or a lot!

6) Max out HSA (if you have one) Skip this step if your health insurance doesn't allow you to have an HSA, but try to get one if you can... HSAs are a triple-tax loophole

7) Pay off student loans and car loans You already have some investment accounts going, so now is a good time to start aggressively paying off these loans. after all, financial freedom means being debt-free too!

8) Max out 401k (or your Solo 401k or Sep IRA) This is beyond your employer match. you can put up to $23k total (or up to $69k with a Solo or SEP) so this is a way to shield a ton of your income from Uncle Sam, plus put away mad money for your freedom!

9) Other financial goals For example, paying off your mortgage early or buying a house!

10) Taxable brokerage account If you've maxed out all the above, you're freaking crushing it. now you can start putting the overflow into a brokerage account. early retirement here I come!

Every time you get paid, fill the first cup, then put any leftover money into the next cup, and the next and the next. If a cup is already full, just let the money “overflow” into the next cup. Notice that some cups reset back to zero every year (such as the Roth IRA, where the contribution limit resets every year). Other cups stay full (such as the emergency fund, where once you’ve saved up enough, you don’t have to keep adding to it). The key here is to tackle your financial goals SEQUENTIALLY and ONE AT A TIME. If you try to do everything at once, you won’t make much progress. This is inefficient and demotivating. Direct your money like a firehose versus like a sprinkler.

PRO TIP: Focus on making more money

The average person barely makes enough to save anything, let alone achieve financial freedom. Don’t settle for average. If you really want to achieve financial freedom, you will need to STRETCH YOURSELF! You will need to MAKE MORE MONEY! It’s the only way to create the “overflow” that allows you to fill up more and more cups in the Waterfall Method we talked about above and move towards financial freedom. Instead of wondering “Why do I make so little money?”, start asking yourself “HOW can I make EVEN more money than I do now?”

Here are some ideas to jumpstart you:

• Learn in-demand, high-income skills that command top dollar (data analytics, coding,

content creation, video editing, artificial intelligence, direct response copywriting, nursing, online marketing, etc.)

• Negotiate your pay every 6-12 months and keep hopping around to bigger and better

  jobs

• Build your network so you can access bigger career opportunities

• Work on yourself and your mindset so that you open yourself to receiving more money

• Seek out mentors and coaches who have had massive success in the area you want to

succeed in. Success leaves clues... observe them and copy them.

The financially free version of you is NOT going to look anything like the version of you today. Be open to greatness, and let the ideas come to you. Then, when the money starts pouring in, follow the steps laid out in this Financial Freedom.

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